Coming to a video game near you: more ads

Gaming has gone mainstream, and advertisers are scrambling to take advantage …

Maybe you've seen the episode of The Office where the Steve Carrell character ends up at Chili's, orders his Awesome Blossom "extra awesome," and breaks into the Chili's theme song ("I want my baby back, baby back, baby back... ribs."). The moment, of course, was paid for by the restaurant chain. Such product placements have grown increasingly common in both television and movies (if you've seen Michael Bay's The Island, you've seen the practice taken to unintentionally ludicrous extremes) as the traditional 30-second spot loses its effectiveness with viewers. Many of those viewers, especially the coveted young male demographic, have put down the remote and picked up a video game controller, and where eyeballs go, advertisers are sure to follow.

That's the gist of a new BusinessWeekarticle that focuses largely on the game American Wasteland. As systems grow more powerful, games are getting more expensive to develop, and advertising is one way of underwriting the title's cost. None of this is surprising, but what does come as a shock is just how much advertisers are willing to pay to get their name in the game. For American Wasteland, Chrysler, Nokia, and Motorola together ponied up US$2 million to ensure product placement—nearly 10 percent of the game's total development cost.

What did they get for their money? Advertising on in-game billboards, for one, but Jeep also got its own vehicles into the game as 3-D models. Not content simply to place their products in a game, advertisers want to know how well such placements are paying off. The advertising market has grown large enough for video games that Nielsen (the TV ratings people) have launched a new service designed to provide data from video games as well. When Nielsen looked at American Wasteland, they found that Jeep's campaign was quite successful, and what's more, even welcomed by players.

"Jeep learned that all players were shown the 3-D vehicles an average of 23 times in 20 minutes. And 96% of those who recalled seeing the Jeep felt the vehicles fit well in the game. Feedback even more welcome to Jeep: 51% of American Wasteland players, including some not yet driving, said they would recommend Jeep to a friend, and 65% would consider eventually buying one."

These results line up with the findings of a larger study done by Nielsen and Activision late last year which showed that well-integrated ads did not detract from a player's gaming experience. In fact, if gamers felt that the ad fit the game, they tended to appreciate the placement.

"Research results also found that, contrary to the assumption that highly pervasive ads would detract from the game play and frustrate gamers, a majority of study participants said that when the product is relevant to the game, advertising enhances the experience. Underscoring relevance, the study revealed that the vast majority of gamers who recalled a product in a game felt it fit the game they were playing. Moreover, a much higher percentage of gamers changed their opinion of the product positively versus negatively after having played the game."

Of course, not all is sweetness and light in the brave new world of "branded content." As we reported earlier this year, in-game advertising has the potential to be just as seedy as its traditional counterpart, and companies are still working out the rules of the game. But now that the videogame industry is pulling in more than US$10 billion a year, expect to see one basic rule prevail: more ads are better.

This article brought to you by Michael Bay's new movie Return to the Island, where beautiful clones sip Coke products while working on their Macs in the back seat of a Chevy Avalanche.